UK economy shrinking even more than thought

By staff

The British economy shrank even more than previously thought, new figures have revealed.

Office for National Statistics (ONS) figures show GDP decreased by 0.3% in the fourth quarter of 2011, worse than the 0.2% originally estimated.

"It's very worrying news that the economy shrank even more than we thought at the end of last year. And these revised figures also show that since George Osborne's spending review our economy has flatlined and not grown at all," shadow chancellor Ed Balls said.

"This slow growth and rising unemployment means the government is set to borrow an extra £150 billion to pay for the cost of economic failure."

The new figures will make painful reading for the Treasury, as it reels from a badly received Budget which cut taxes for those earning over £150,000 and imposed harsh new measures on pensioners.

Critics complained the Budget contained no new plans for growth, despite the continued under-performance of the British economy.